Home > Press > FEI Company Reports Record Bookings and Earnings for the Fourth Quarter of 2006

Abstract:
FEI Company (Nasdaq:FEIC) reported increases in bookings, revenue, earnings and cash for thefourth quarter of 2006. Bookings and earnings were the highest in the company's history, and quarterly revenue was the second-highest ever.

FEI Company Reports Record Bookings and Earnings for the Fourth Quarter of 2006

Hillsboro, OR | Posted on February 6th, 2007

Net sales for the quarter ended December 31, 2006 of $140.3 million
were up 21% compared to the third quarter of 2006 and 41% compared to the
fourth quarter of 2005. Bookings in the latest quarter totaled $171.7
million, up 16% from the third quarter of 2006 and 50% from the fourth
quarter of 2005. The book-to-bill ratio for the latest quarter was 1.22 to
1.00, and the backlog at the end of the quarter was $305.9 million, of
which approximately 90% is expected to ship by the end of 2007.
Income from continuing operations for the fourth quarter of 2006 was
$11.9 million, compared with income from continuing operations of $6.9
million in the third quarter of 2006 and a net loss of $30.9 million from
continuing operations in last year's fourth quarter. Diluted earnings per
share from continuing operations in the latest quarter were $0.30, compared
with diluted earnings per share of $0.18 from continuing operations in the
third quarter of 2006 and a loss per share of $0.92 from continuing
operations in the fourth quarter of 2005. The gross profit margin improved
to 42.0% in the fourth quarter of 2006, compared with 40.6% in the third
quarter and 28.4% in the prior year's fourth quarter. The tax rate from
continuing operations for the fourth quarter of 2006 was 22.6%, compared
with 32.2% in the third quarter.
During the fourth quarter of 2006, the company sold its small
wholly-owned software subsidiary, Knights Technology Inc. The financial
statements for all reporting periods have been recast to reflect the
results of Knights Technology as a discontinued operation. For the fourth
quarter of 2006, the company reported an after-tax gain of $2.8 million,
equal to $0.06 per diluted share, primarily from the sale of this
discontinued operation. Including the impact of the discontinued operation,
net income in the fourth quarter of 2006 was $14.7 million or $0.36 per
diluted share.
"We ended 2006 with a strong performance," said Don Kania, president
and CEO of FEI. "Revenue and earnings exceeded our guidance and were above
the prior quarter and the prior year. Bookings continued to be solid across
all of our market divisions, with particular strength in our NanoResearch
and Industry market, highlighted by a $11.5 million order from the
Technical University of Denmark, the largest single order ever received by
the company. Our gross margin improved to 42%, reflecting increased volume
and improved product mix. We also increased our total cash and cash
investment position during the quarter by $40.4 million, due to increased
profitability, the sale of Knights and improved working capital
utilization."
For the full year 2006, bookings were $601.4 million, a 34% increase
from 2005. Revenue for 2006 was $479.5 million, up 14% from 2005. Income
from continuing operations for 2006 was $17.7 million or $0.47 per diluted
share, compared with a loss from continuing operations of $78.5 million or
$2.34 per share in 2005. Net income for 2006 was $20.0 million or $0.53 per
diluted share compared with a net loss of $78.2 million or $2.33 per share
in 2005.
Bookings and revenue comparisons for the company's three market
segments and other data are included in the supplementary information
attached to this release, along with detailed statements of operations and
balance sheets.
The company's balance sheet remained strong. Total cash and investments
at the end of the quarter were $406.1 million, and convertible debt at the
end of the quarter remained unchanged from last quarter at $310.9 million.
First Quarter Guidance
FEI currently expects net sales for the first quarter of 2007 to be in
the range of $137 million to $144 million. Bookings are expected to be
approximately $150 million. Earnings per share are expected to be in the
range of $0.27 to $0.32 per share. The company expects a tax rate for the
first quarter of approximately 26%.
Investor Conference Call -- 2:00 p.m. PST Tuesday, February 6, 2007
Parties interested in listening to FEI's quarterly conference call may
do so by dialing 1-800-240-4186 (domestic, toll-free) or 1-303-262-2211
(international) and asking for the FEI Q4 Earnings call. The call can also
be accessed via the web by going to FEI's Investor Relations page at
http://www.fei.com, where the webcast will also be archived. A telephone
replay of the call will also be accessible for one month by dialing
1-800-405-2236 (US) or 1-303-590-3000 (international) and entering the
access code 11080858#.

About FEIFEI (Nasdaq: FEIC) is a global leader in providing innovativeinstruments for nanoscale imaging, analysis and prototyping. FEI focuses ondelivering solutions that provide groundbreaking results and accelerateresearch, development and manufacturing cycles for its customers inSemiconductor and Data Storage, Academic and Industrial R&D, and LifeSciences markets. With R&D centers in North America and Europe, and salesand service operations in more than 50 countries around the world, FEI'sTools for Nanotech(TM) are bringing the nanoscale within the grasp ofleading researchers and manufacturers. More information can be found onlineat: http://www.fei.com .

Safe Harbor Statement

This news release contains forward-looking statements that include ourguidance for the first quarter of 2007. Factors that could affect theseforward-looking statements include, but are not limited to, the strength ofthe NanoResearch and Industry, NanoElectronics and NanoBiology segments;cyclical changes in the data storage and semiconductor industries, whichare the major components of the NanoElectronics market; fluctuations inforeign exchange, interest and tax rates; our continued ability to maintaindeferral accounting of hedge transactions; reduced profitability due tofailure to achieve or sustain margin improvement or cost reductions; lowerthan expected customer orders; cancellation of customer orders; failure ofcustomers to adopt new technologies; increased competition and new productofferings from competitors; lower average sales prices and reduced marginson some product sales due to increased competition; failure of thecompany's products and technology to find acceptance with customers; delaysin shipping products; changes in the mix of products sold in a quarter;unfavorable business conditions and lack of growth in the general economy,both domestic and foreign; potential restructurings and reorganizations notpresently anticipated; reduced sales due to geopolitical risks; changes intrade policies and tariff regulations; changes in the regulatoryenvironment in the nations where we do business; additional research anddevelopment expenses; inability to overcome technological barriers;additional selling, general and administrative expenses; additional costsrelated to future merger and acquisition activity; and failure of thecompany to achieve anticipated benefits of current or future acquisitions,including failure to achieve financial goals and integrate the acquisitionssuccessfully. Please also refer to our Form 10-K, Forms 10-Q, Forms 8-K andother filings with the U.S. Securities and Exchange Commission foradditional information on these factors and other factors that could causeactual results to differ materially from the forward-looking statements.FEI assumes no duty to update forward-looking statements.